Mitsu Chem Plast Limited
Your Directors have pleasure in presenting the 29th Board's Report of your Companytogether with the Audited Statement of Accounts and the Auditors' Report of your
Company for the financial year ended 31st March 2017.
|FINANCIAL HIGHLIGHTS || || |
| || ||(IN LAKHS) |
|Particulars ||FY 2016-17 ||FY 2015-16 |
|Gross Income ||11172.36 ||10366.22 |
|Pro t Before Interest and Depreciation ||906.02 ||851.51 |
|Finance Charges ||383.79 ||407.44 |
|Provision for Depreciation ||197.11 ||184.37 |
|Net Pro t Before Tax ||325.12 ||259.69 |
|Provision for Tax ||81.46 ||68.82 |
|Net Pro t After Tax ||243.67 ||190.87 |
|Earnings Per Share ||6.87 ||4.89 |
REVIEW OF OPERTAIONS & STATE OF AFFAIRS
During the year under review your Company moved forward strongly sustained theperformance and recorded a turnover of Rs. 11154.67 Lakhs including the Domestic turnoverof Rs.11133.03 Lakhs (PY - Rs.10338.37 Lakhs) and the Export turnover of Rs. 21.64 Lakhs(PY -Rs.16.98 Lakhs).
The Net Pro t of your Company for the year under review was Rs. 243.61 Lakhs asagainst Rs. 190.87 Lakhs during the previous year 2015-16.
CHANGE IN NATURE OF BUSINESS IF ANY
There was no change in nature of Business of the Company during the year under review.
The Board recommends a nal dividend of Re. 0.50/- per equity share
(i.e. 5%) for the FY 2016-17. The dividend if approved at the Annual General Meeting(AGM) will be paid to those members whose names appear in the Company's Register ofMembers on Wednesday 20th September 2017
TRANSFER TO RESERVES IN TERMS OF SECTION 134 (3) (J) OF THE COMPANIES ACT 2013
The Company has not transferred any amount to General Reserves for the
nancial year 2016-2017.
INFORMATION ABOUT SUBSIDIARY/ JV/ ASSOCIATE COMPANY
Company does not have any Subsidiary Joint venture or Associate Company.
MATERIAL CHANGES & COMMITMENTS
There were no material changes and commitments affecting the financial position of theCompany which occurred between the end of the
nancial year to which these financial statements relate and the date of this Report.
EXTRACT OF ANNUAL RETURN
The extract of Annual Return in Form MGT-9 as required under section 92(3) of theCompanies Act 2013 (hereinafter referred as "Act") and prescribed in rule 12 ofthe Companies (Management and Administration) Rules 2014 is annexed to this Report andmarked as Annexure-I
DIRECTORS & KEY MANAGERIAL PERSONNELS
a) Composition of the Board
The Board is constituted with proper balance of Executive and Non-Executive Directors.The total strength of the Board was of 6 (Six) Directors on 31st March 2017 comprising of3 (three) Executive Directors and 3 (three) Non-Executive Directors out of which 1 (one)is a Woman Director and 2 (two) are Independent Directors.
b) Retires by rotation
Mr. Jagdish Dedhia Director retires by rotation in terms of provisions of the Act atthe ensuing Annual General Meeting of the Company and offers himself for re-appointment.The Board recommends his re-appointment. As stipulated under the Regulation 36(3) of SEBI(Listing Obligation and
Disclosure Requirements) Regulations 2015 (hereinafter referred as "ListingRegulations") brief resume of the director proposed to be re-appointed is given inthe Notice convening the Annual General Meeting.
c) Change in Composition of Board and Key Managerial Personnel
The Changes in the composition of the Board of Directors and Key Managerial Personnelthat took place during the year under review were carried out in compliance with theprovisions of the Act and Listing Regulations.
The Company has appointed Mr. Jagdish Dedhia as "Chairman and Whole-timeDirector" Mr. Manish Dedhia as "Joint Managing Director and
Chief Financial Of cer" and Mr. Sanjay
Dedhia as "Joint Managing Director" to hold their respective of ces for theperiod of (3) three consecutive years w.e.f. 1st May 2016. Pursuant to the provision ofSection 149(1) of the Act Mrs. Ameeta Dedhia has been appointed as a Non-ExecutiveNon-Independent Women Director w.e.f 13th June 2016. Pursuant to the provision of Section149(4) of the Act Mr. Dilip Gosar has been appointed as an Independent
Director to hold the of ce for the period of (5) ve consecutive years w.e.f. 13th June2016 and Mr. Ashish Doshi has been appointed as an Independent Director to hold the of cefor the period of (5) ve consecutive years w.e.f. 25th June 2016 Ms. Drishti Thakker hasbeen appointed as "Company Secretary & Compliance
Of cer" w.e.f. 19th July 2016 pursuant to Section 203 of the Act read with theCompanies (Appointment and remuneration of Managerial Personnel) Rules 2014.
d) Declaration by Independent Director(s)
All Independent Directors have given declarations that they meet the criteria ofindependence as provided under Section 149 (6) of the Act and Regulation 16(1)(b) of theListing Regulations. e) Number of Meetings of the Board
During the year under review 17 (Seventeen) Board Meetings were convened and held onthe following dates.
|27/04/2016 ||28/06/2016 |
|29/04/2016 ||08/07/2016 |
|02/05/2016 ||19/07/2016 |
|11/05/2016 ||10/08/2016 |
|09/06/2016 ||06/09/2016 |
|13/06/2016 ||11/01/2016 |
|14/06/2016 ||13/01/2017 |
|16/06/2016 ||10/03/2017 |
|24/06/2016 || |
The gap between two Board Meetings did not exceed 120 days.
Details of Board meetings attended by Board of Directors:
|Sr. No. ||Name of Directors ||No. of Meetings attended |
|1 ||Mr. Jagdish Dedhia ||17/17 |
|2 ||Mr. Sanjay Dedhia ||17/17 |
|3 ||Mr. Manish Dedhia ||17/17 |
|4 ||Mrs. Ameeta Dedhia* ||09/17 |
|5 ||Mr. Dilip Gosar* ||09/17 |
|6 ||Mr. Ashish Doshi** ||05/17 |
* Mrs. Ameeta Dedhia & Mr.Dilip Gosar have been appointed as directors w.e.f 13thJune 2016. ** Mr. Ashish Doshi has been appointed as a director w.e.f 25th June 2016
As stipulated by the Code of Independent Directors pursuant to Companies Act 2013 andthe Listing Regulations a separate meeting of the Independent Directors of the Companywas held on 30th May 2017 to review the performance of Non-independent Directors(including the Chairman) and the entire Board.
COMMITTEES OF THE BOARD
During the year under review your directors have constituted or re-constitutedwherever required the following committees of the Board in accordance with therequirements of the Companies Act 2013. The composition terms of reference and otherdetails of all the Board level committees have been elaborated in the report.
a) Audit Committee
The Committee was constituted on 28th June 2016 and it consists of 2 (two)Non-Executive Independent Directors and (1) one Executive Director. The Chairman of theCommittee is an Independent Director. Ms. Drishti Thakker acts as the Secretary to theCommittee w.e.f. 19th July 2016.
The Members of the Committee are well versed in finance matters accounts company lawand general business practices.
b)Constitution and Attendance Details
During the financial year 2016-17 the
Committee met 2 times during the year on 11th November 2016 and on 10th March 2017.The constitution and attendance details of the Audit Committee meetings are as under :
|Sr. No. ||Name of Directors ||Designation ||No. of Meetings Attended |
|1 ||Mr. Dilip Gosar ||Chairman ||2/2 |
|2 ||Mr. Ashish Doshi ||Member/ Non-executive Independent ||2/2 |
|3 ||Mr. Manish Dedhia ||Member/ Executive Non- Independent ||2/2 |
Terms of Reference
The brief terms of reference of Audit
Committee are as under -
i. To oversee the Company's financial reporting process and the disclosure of itsfinancial information to ensure that the financial statement is correct sufficient andcredible.
ii. Recommending the appointment and removal of external auditor xation of audit feeand also approval for payment for any other services.
iii.Reviewing with management the annual financial statements before submission to theBoard focusing primarily on:
a. Any changes in accounting policies and practices.
b. Major accounting entries based on exercise of judgment by management.
c. Quali cations in draft audit report if any.
d. The going concern assumption.
e. Compliance with accounting standards.
f. Compliance with Stock Exchange and legal requirements concerning financialstatements. g. Any related party transactions i.e. transactions of the Company of materialnature with promoters or the management their subsidiaries or relatives etc. that mayhave potential con ict with the interests of Company at large.
h. Reviewing with the management External and Internal auditors the adequacy ofInternal Control System.
i. The Company has in place its own in house internal audit department to review theadequacy of internal audit function including the structure of internal audit departmentstaff and seniority of of cial's heading the department reporting structure coverage andfrequency of internal audit.
j. Reviewing the ndings of any internal investigations in the matters where there issuspected fraud or irregularity or failure of internal control systems of a materialnature and reporting the matter to the Board. k. Discussion with external auditors beforethe audit commences nature and scope of audit as well as post-audit discussion toascertain any area of concern.
l. Reviewing the Company's financial and risk management policies.
m.To look into the reasons for substantial defaults in the payment to the depositorsdebentures holders shareholders (in case of no nonpayment of declared dividends) andcreditors.
n. To approve the appointment of the Internal auditor after assessing the qualications experience background etc. of the candidate.
Whistle Blower Policy / Vigil Mechanism
As per the provisions of Section 177(9) of the Act the Company has established a VigilMechanism for Directors and Employees by formulating Whistle Blower Policy to reportgenuine concerns about unethical behaviour actual or suspected fraud or violation of theCode of Conduct without fear of reprisal. The said policy can be accessed on the Company'swebsite www.mitsuchem.com.
Nomination and Remuneration Committee:
The Committee was constituted on 28th June 2016 and it consists of 3 (three)non-executive Directors out of which two are Independent Directors. The Chairman of theCommittee is an Independent Director. Ms. Drishti Thakker acts as the Secretary to theCommittee w.e.f. 19th July 2016.
Constitution and Attendance Details
One meeting of the Committee was held on 11th November 2016 under review. Theconstitution and of the Nomination and Remuneration Committee is as under :
|Sr. No. Name of Directors ||Designation |
|1 Mr. Ashish Doshi ||Chairman |
|2 Mr. Dilip Gosar ||Member/ Non-executive Independent |
|3 Mrs. Ameeta Dedhia ||Member/ Executive Non- Independent |
Terms of Reference
The brief terms of reference of this committee are as under -
a. To determine the remuneration package for any Executive Directors as well asremuneration payable to the non-executive Directors from the year to year.
b. To help in determining the appropriate size diversity and composition of the Board;
c. To recommend to the Board appointment/reappointment and removal of Directors;
d. To frame criteria for determining quali cations positive attributes andindependence of Directors.
e. To create an evaluation framework for Nonexecutive & Independent Directors andthe Executive Board;
f. Delegation of any of its powers to any Member of the Committee or the Compliance Ofcer
Nomination and Remuneration Policy
The Remuneration Policy recommended by Nomination and Remuneration Committee has beenaccepted by the Board of Directors. This policy is applicable to all Directors KeyManagerial Personnel (KMP) Senior Management team and other employees of the Company andthe same has been is annexed to this Report and marked as "Annexure-II"and is also available on the Company's website www.mitsuchem.com.
Your Company has been familiarizing the Independent Directors on its Board withdetailed presentations by its business functional heads on the
Company operations strategic business plans new products and technologies includingsigni cant aspects of the Industry and its future outlook.
c) Stakeholders' Relationship Committee:
The Committee was constituted on 28th June 2016 and it consists of 3 (three)non-executive Directors out of which two are Independent Directors. The Chairman of theCommittee is an Independent Director.
Constitution and Attendance Details
No meetings of the Committee were held during the year under review. The constitutionand of the Stakeholders' Relationship Committee is as under:
|Sr. No. ||Name of Directors ||Designation |
|1 ||Mr. Dilip Gosar ||Chairman |
|2 ||Mr. Ashish Doshi ||Member/ Non-executive Independent |
|3 ||Mrs. Ameeta Dedhia ||Member/ Executive Non- Independent |
Ms. Drishti Thakker was appointed as the Company Secretary and Compliance O_cer of theCompany w.e.f. 19th July 2016.
Terms of Reference
The brief terms of reference of this committee are as under -
a. Redress Shareholders and Investors complaints.
b. Review all matters connected with the share transfers.
c. Review status of legal cases involving the investors where the Company has been madea party.
Details of Investors Complaints received during F.Y. 2016-17:
|Sr. No. ||Nature of Complaints ||No. of Complaints Received ||No. of Complaints Redressed ||Pending Complaints |
|1 ||Non-Receipt of dividends ||NIL ||NIL ||NIL |
|2 ||Non-receipt of shares lodged ||NIL ||NIL ||NIL |
| ||for transfer/ transmission || || || |
|3 ||Non-receipt of ||NIL ||NIL ||NIL |
| ||Annual Report || || || |
ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
The details of conservation of energy technology absorption and foreign exchangeearnings and outgo as required under section 134(3)(m) of the Companies Act 2013 readwith Rule 8(3) of the Companies (Accounts) Rules 2014 are as below:
A. CONSERVATION OF ENERGY
The Company is making continuous efforts on ongoing basis to conserve the energy byadopting innovative measures to reduce wastage and optimize consumption. Some of thespecific measures undertaken are:
i) Steps taken by the company on conservation of energy:
a. 250 & 150 Watt Sodium Vapour lights are replaced with 18 & 75 Watt LEDLights which have resulted in approx. 50% energy saving for plant lighting system.
b. Grinder controllers have been installed resulting into approx. 20 % saving of energyin Grinder Control System.
c. Cooling tower fan controllers have been installed which operates on temperature ofwater in sumps and has recorded energy saving of approx. 5 % in cooling tower watersystem.
d. Variable Frequency drives have been installed in hydraulic system which savesapprox. 20% power used in the system.
ii) Steps taken by the company for utilizing alternate sources of energy includingwaste generated:
Polycarbonate sheets have been made into use as a source of natural lights in theplants for day shifts. Roof Air ventilators used in plant. Gravity chutes which areconveyors that work without the use of electricity have been made into use for movement ofmaterials.
iii) The capital investment on the energy conservation equipment's: NIL
B. TECHNOLOGY ABSORPTION ADAPTION & INNOVATION
i) The efforts made towards technology absorption:
The Company sets target for technology improvement based on global competitioncriteria. The company continues its efforts on various Research & Development(R&D) activities for new innovative products and technology.
ii) The bene ts derived like product improvement cost reduction productdevelopment or import substitution:
Blow Molding Boosters used effectively with chilled air for increasing the production.
iii) The details of Imported Technology (imported during the last three yearsreckoned from the beginning of the financial year):
iv) The expenditure incurred on Research & Development:
C. FOREIGN EXCHANGE EARNING & OUTGO:
|Particulars during the FY 2016-17 ||Amount |
|Foreign exchange earnings (value of export) ||21.64 |
|Foreign exchange outgo (value of import) ||1201.48 |
The Audit Committee has been delegated the responsibility for monitoring and reviewingrisk management assessment and minimization procedures developing implementing andmonitoring the risk management plan and identifying reviewing and mitigating all elementsof risks which the Company may be exposed to. The Board also reviews the risk managementassessment and minimization procedures
CORPORATE SOCIAL RESPONSIBILITY
The Company is not falling under the criteria as mentioned in the Section 135 of theCompanies Act 2013 and rules made thereof which specifies the requirement of forming theCorporate Social Responsibility Committee.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to the provisions of Section 134(3)(c) read with Section 134(5) of the Actthe Directors of your Company state and con rm that:
a) in the preparation of the annual accounts for the financial year 2016-17 theapplicable accounting standards had been followed and there are no material departuresfrom the same;
b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company as at March 31 2017 and of the pro t andloss of the company for that period;
c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities; d)the directors had prepared the annual accounts on a going concern basis;
e) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; and
f) the directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
a. Statutory Auditors & their Report
The Board of Directors on the recommendation of the Audit Committee proposed the nameof P. V. Dalal & Co. Chartered Accountants Mumbai (Registration no. 102049W) to beappointed as Statutory Auditors of the Company in place of retiring auditors V. J. Shah& Co Chartered Accountants Mumbai (Registration
No. 109823W) to hold of ce from the conclusion of 29th Annual General Meeting untilthe conclusion of 34th Annual General Meeting of the Company (subject to rati cation oftheir appointment by Members at every Annual General Meeting) subject to the approval ofthe members in the ensuing 29th Annual General Meeting .
The Auditors' Report to the Shareholders for the year under review is annexed to thisReport and it does not contain any reservation quali cation or adverse remark. Thecomments in the Auditors' Report read with notes to the accounts are self-explanatory.
b. Secretarial Auditor & their Report
Pursuant to the provisions of Section 204 of the Act read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 (as amended) theCompany has appointed H. P. Sanghvi & Co. Practicing Company Secretaries (MembershipNo. 2259) for conducting Secretarial Audit of the Company for the financial year ended onMarch 31 2017. The Secretarial Audit Report is annexed to this Report and marked as Annexure-III.
In relation with the auditor's observation on the report regarding the non ling ofe-Form CHG-1 with the Ministry of Corporate Affairs (MCA) as required pursuant to Section77 of Companies Act 2013 for the charge created on vehicles by way of hypothecation itis hereby clari ed that the Company was in bona de belief that required procedure had beencomplied with. The Board assures the members of the Company that the Company will exercisecaution in future and ensure that all the provisions are adhered to by Company.
PARTICULARS OF LOANS GUARANTEE AND INVESTMENTS
Particulars of loans guarantees and investments made by the Company pursuant toSection 186 of the Companies Act 2013 are given in the Notes to the Financial Accounts.
DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
The Company has zero tolerance towards sexual harassment at the workplace and hencehas formulated Sexual Harassment Policy which is available at the Registered Of ce of theCompany and is accessible to all the employees of the Company. During the year underreview has not received any complaints of sexual harassment.
During the year under review the Company has not accepted any deposits from the publicand as such there are no outstanding deposits in terms of the Companies (Acceptance ofDeposits) Rules 2014.
SHARE CAPITAL a. Redemption of Preference Share Capital:
The Board of Directors at their meeting held on 27th April 2016 had exercised theoption to redeem 155000 10% Redeemable Preference shares of Rs. 100/- each aggregatingto Rs. 15500000/- which were issued on the terms of redemption at par at the end of tenyears of allotment or earlier at the option of the Company. b. Reclassi cation ofAuthorized Share
At the Extraordinary General Meeting held on 30th April 2016 the authorised sharecapital comprising of Rs.32500000 divided into 170000
Equity Shares of Rs. 100/- each and 155000 Preference shares of Rs. 100/- each havebeen reclassi ed into Rs.32500000 divided into 325000
Equity shares of Rs. 100/- each.
c. Sub-division & Increase in Authorized
At the Extraordinary General Meeting held on 14th June 2016 the Company hassub-divided the face value of its equity shares from Rs.100/- to Rs.10/- per share in theauthorized issued subscribed and paid up capital of the Company and post sub-divisionthe authorised share capital was increased from Rs. 32500000/- divided into 325000Equity shares of
Rs.10/- each to Rs. 40250000 divided into 4025000 Equity shares of Rs.10/- each bycreation of 3700000 additional Equity shares of Rs. 10/- each.
d. Issue and allotment of Bonus Shares:
At the Extraordinary General Meeting held on 14th June 2016 the Company issued2115000 equity shares as bonus shares in the ratio of 3:2 (i.e. three equity shares forevery two equity shares already held) and the said bonus shares were allotted in themeeting of the Board of directors held on 14th June 2016.
e. Initial Public Offer & consequent listing of Shares on SME Exchange of BSELimited:
During the year under review the Company made initial Public Offer (IPO) for 1000800Equity Shares for cash at a price of Rs. 95/- per share including a premium of Rs. 85/-per share aggregating to Rs.950.76 lakhs through an offer for sale by the sellingshareholders. Your directors are pleased to inform you that the Company's securities havebeen listed on SME Exchange of BSE Limited w.e.f 9th September 2016.
f. Buy Back of Securities/ Sweat Equity/
Employees Stock Option Plan
During the year under review the Company has not bought back any of its securities norissued any Sweat Equity Shares nor provided any Stock Option Scheme to the employeesduring the year under review.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Pursuant to Regulation 34 of the Listing Regulations the Management Discussion andAnalysis Report for the year under review is annexed to this Report as "Annexure-IV".
Since the Company has listed its securities on SME platform during the year underreview the provisions of Corporate Governance as specified in regulations 17 to 27 andclauses (b) to (i) of sub-regulation (2) of regulation 46 and para C D and E of ScheduleV of SEBI (LODR) Regulations 2015 are not applicable to the Company for the financialyear ended 31st March 2017.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There were no signi cant and material orders passed by the Regulators /Courts thatwould impact the going concern status of the Company and its future operations.
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
The Company has in place adequate internal financial controls with reference to thefinancial statements.
The Audit Committee evaluates the ef ciency and adequacy of the financial controlsystem in the company and strives to maintain the standards in the Internal FinancialControl.
GENERAL DISCLOSURES Related Party Transactions
All transactions entered into with related parties as de ned under the Companies Act2013 during the finan-cial year were in the ordinary course of business and on an arm'slength pricing basis and do not attract the provisions of Section 188 of the CompaniesAct 2013. There were no materially signi cant transactions with the related partiesduring the
nancial year which were in con ict with the interest of the Company and henceenclosing of Form AOC-2 is not required. Suitable disclosure as required by the AccountingStandard (AS 18) has been made in the notes to the Financial Statements.
Particulars of Employees:
Disclosures pertaining to remuneration and other details are required under Section197(12) of the Act read with Rule 5(1) and 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is forming part of the Directors' Reportfor the year ended 31st March 2017 and is annexed to this Report and marked as "AnnexureV ".
During the financial year 2016-17 no employee whether employed for whole or part ofthe year was drawing remuneration exceeding the limits mentioned under Section 197(12) ofthe Act read with Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014.
Registrar and Transfer Agent:
The Company had appointed Bigshare Services Pvt. Ltd as Registrar and Transfer Agent(RTA).The Company's RTA have adequate infrastructure to process investor grievances withregards to transfers transmission and other such matters.
The Company has complied with all the statutory requirements. A declaration regardingcompliance of the provisions of the various statutes is also made by the ManagingDirector. The Company ensures compliance of the Act SEBI (Listing Obligation and
Disclosure Requirements) 2015 and various statutory authorities on quarterly basis inthe Board Meeting.
Your Directors would like to express their sincere appreciation for the commitmentdedication and hard work done by the employees of the Company and the positiveco-operation extended by Banks Government Authorities Customers and various otherstakeholders. Your Directors also wish to place on record their deep gratitude towards theshareholders for their continued support and con dence.
| ||For and On Behalf of Board of Directors |
| ||Mr. Jagdish Dedhia |
| ||Chairman & Whole-Time Director |
|Registered of ce: ||DIN: 01639945 |
|329 Gala Complex 3rd Floor || |
|Din Dayal Upadhyay Marg || |
|Mulund (W) Mumbai 400 080. || |
|Date: 29th August 2017 || |
|Place: Mumbai || |